Impact of Consumer Awareness and Behavior on Business Exits in the Hospitality, Tourism, Entertainment, and Culture Industries under the COVID-19 Pandemic

Hiroyuki Okamuro, Yasushi Hara and Yunosuke Iwaki
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Yasushi Hara: Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy (TDB-CAREE), Hitotsubashi University, Tokyo 186-8601, Japan
Yunosuke Iwaki: Graduate School of Economics, Hitotsubashi University, Tokyo 186-8601, Japan

Administrative Sciences, 2022, vol. 12, issue 4, 1-19

Abstract: Empirical studies on small business survival and exits focus on endogenous firms and top manager characteristics, whereas few studies consider exogenous demand shocks and local consumer awareness and behavior, which are especially important for local hospitality industries. Therefore, this study addresses this research gap by targeting the COVID-19 pandemic and anti-contagion policies as a local demand shock for service industries. We empirically investigate the causal effects of changing local consumer awareness and behavior under COVID-19 on business exits at the prefecture-industry level. Based on a panel fixed-effect estimation using a longitudinal dataset of 32 service industries in 47 prefectures over 10 months in Japan, we demonstrate that an increase in consumers’ risk aversion and sympathy for self-restraint from going out, and a decrease in going out with family members, significantly increase the exit ratio in specific service industries in the same prefecture. Moreover, we find that these effects vary by consumer type depending on factors such as gender, age, income level, and household structure.

Keywords: business exit; demand shock; COVID-19; consumer awareness; service industry (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Impact of consumer awareness and behavior on business exit in hospitality, tourism, entertainment, and culture industries under the COVID-19 pandemic (2021)
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